The demand for workers who are good at complex problem-solving, interactions with clients and colleagues, and able to adapt to new tools and technologies is rising, while the demand for less advanced skills that can be replaced by technology is declining. Neglecting investments in human capital can dramatically weaken a country’s competitiveness.

“The world is healthier and more educated than ever,” notes the World Bank in a new report, The Human Capital Project. “But a large and unfinished agenda remains. Life expectancy in the developing world still lags far behind that of rich countries… Worldwide, more than 260 million children and youth are not in school. Meanwhile, nearly 60 percent of primary school children in developing countries fail to achieve minimum proficiency in learning.”

Why should countries invest in human capital? As World Bank Group President Jim Yong Kim wrote in Foreign Affairs. “With technological progress placing a premium on higher-order skills, the failure of countries to lay the groundwork for their citizens to lead productive lives will not only carry high costs; it will also likely generate more inequality. It will put security at risk, too, as unmet aspirations can lead to unrest.”

To address this issue, the World Bank introduced the Human Capital Index. The HCI is designed to quantify the amount of human capital that a child born today can expect to attain by age 18 given the prevailing health and education conditions in the country where the child lives. It will be updated periodically and refined as data measures improve. This video nicely explains the HCI and what it measures.

The HCI is based on key measures in three categories: the under-5 mortality rate; quality and quantity of learning and the health environment. The resulting index for each of the measures ranges between 0 and 1, from which an overall Human Capital Index is arrived at for each country. A score of 1.0 means that a child born in that country can expect to achieve both full health and education. A lower score, say .70, means that the productivity of a child born in that country will be 70% of what could have been achieved with full health and education. Globally, 56% of all children born today will have a score of .50 or lower, meaning that they’ll grow up to be, at best, half as productive as they could be.

HCIs were calculated for 157 countries around the world. Briefs and datasets are available for each country. Let me briefly discuss some of the findings.

Ten countries have HCIs higher than .80, with Singapore at the top with an HCI of .88. This means that children born in Singapore today will be 88% as productive when they grow up as they could possibly be if they enjoyed complete education and full health. One hundred percent of children in Singapore survive to age 5.Singapore children can expect to complete 13.9 years of school by age 18, and 95% of 15 year olds will survive to age 60.Following Singapore with similar high HCIs are South Korea, Japan, Hong Kong, Finland, Ireland, Australia, Sweden, Netherlands and Canada.

Twenty-nine countries have HCIs between .70 and .80, including the US with an HCI of .76.

At the other end of the spectrum, 26 countries have HCIs under .40. Chad has the lowest at .29. Other countries with similar low HCIs include South Sudan, Niger, Mali, Nigeria, Sierra Leon, Mauritania, Côte d'Ivoire, Mozambique and Angola.

A recent McKinsey study on the impact of AI on the world economy found that AI and related technologies have the potential to incrementally add around $13 trillion to current global economic output by 2030. But the study also found that the benefits of these advanced technologies will be distributed unequally, widening the economic gaps between countries as well as the skill gaps between their workers.

The World Bank’s country-by-country analysis provides quantitative evidence of this growing human capital gap. Children born in countries at the upper third of the scale (.65-.88) have HCIs that are 1.5 to 3.0 times higher that those at the lower third of the HCI scale (.29-.46).

Many disadvantaged families want to invest in better health and education for their children, but, in general, families and individuals cannot afford the costs of acquiring human capital. In the end, governments must play the leading role in human capital investments.

In its call to action, the World Bank's report emphasizes the need for whole-of-government strategies that cut across politics, institutions and knowledge, and offers three major recommendations:

Sustain efforts across political cycles. “Country experience shows that sustained prioritization of issues is both possible and effective in diverse contexts.” It cites the example of Singapore, where in 1950, adults had, on average, just two years of formal schooling. By emphasizing sustained human development efforts over the decades, Singapore has achieved the highest HCI score, and remains attentive to human capital issues to keep up with rapid technological advances.

Link sectoral programs. “Investments in the infrastructure sectors, complemented with investments in the social sectors, can make substantial contributions to advancing the human capital agenda.” Historical data shows that investments in sewage and clean water infrastructures between 1880 and 1920 accounted for a large share of the decline in child mortality in the then more advanced countries around the world.

Expand the evidence base for policy design. For example, recent analysis of the long-term impact of early childhood interventions in the US have helped make the case for pre-K programs across the country by quantifying the benefits of such targeted investments.

Irving Wladawsky-Berger worked at IBM for 37 years and has been a strategic advisor to Citigroup, HBO and Mastercard. He is affiliated with MIT and Imperial College, and is a regular contributor to CIO Journal.